Ethena Labs Unveils USDtb Stablecoin Backed by BlackRock's Tokenized Money Market Fund BUIDL

Decentralized finance (DeFi) protocol Ethena Labs has unveiled its new stablecoin, USDtb, designed to address risk and stability concerns within its ecosystem.

DeFi protocol Ethena Labs has announced the launch of USDtb, a new stablecoin designed to provide a safer and more stable asset within its ecosystem. Backed primarily by BlackRock’s BUIDL tokenized money market fund, USDtb is set to serve as a resilient option during periods of market volatility.

The stablecoin is structured similarly to fiat-backed counterparts like USDT and USDC, holding cash and cash-equivalent reserves to maintain a 1:1 peg to the U.S. dollar. However, a key aspect of USDtb's reserves is the 90% allocation to the BUIDL fund, the highest among stablecoins pegged to tokenized real-world assets (RWAs).

According to Ethena, this reserve strategy is crucial for scaling USDtb efficiently without encountering liquidity constraints. The stablecoin's launch is part of Ethena's broader strategy to strengthen its financial ecosystem.

In a statement, Ethena founder Guy Young highlighted the stablecoin's role in providing users with a diverse risk profile without leaving the protocol's ecosystem.

"In light of the rapidly accelerating demand for different stablecoin options, we saw a clear opportunity to provide a new product that offers users an entirely different risk profile from USDe without them having to leave our trusted ecosystem," Young said.

In addition to its internal utility, Ethena also plans to integrate USDtb as a backing asset for Ethena’s flagship yield-bearing token, USDe, during periods of negative derivatives funding rates.

By reallocating hedged positions into USDtb, Ethena aims to stabilize yields and reduce exposure to derivative market risks during bearish trends.

To support USDtb's expansion, Ethena has applied for a $1 billion allocation from Spark's Tokenization Grand Prix program, which aims to scale tokenized RWAs.

If allocated, the move would further cement Ethena's role in integrating RWAs into DeFi.

Ahead of its launch, several security measures were undertaken for USDtb. The stablecoin's smart contracts underwent three audits from Pashov, Quantstamp, and Cyfrin, with no critical or medium-level findings.

Additionally, a community-led audit by Code4rena also confirmed no significant vulnerabilities.

For cross-chain functionality, USDtb is being launched as a LayerZero-powered OFT (Omnichain Fungible Token), enabling transfers across Ethereum, Base, Solana, and Arbitrum networks.

The stablecoin is also integrated with Stargate, serving as the bridge for these cross-chain movements to enhance accessibility for users.

Among the partners for USDtb's launch are Copper, Zodia, Komainu, and Coinbase Web3 Wallet for custodial services, while liquidity is being provided by Jump, Cumberland, Wintermute, Amber, GSR, and SCB Limited.

The introduction of USDtb comes amid strong investor interest in Ethena's ecosystem, which was further highlighted by a recent surge in ENA governance token prices.

The token has seen a nearly 100% increase in value over the past month, reaching $1.22, marking its highest level since April 2024 – a 520% rise from its yearly low. Notably, this growth was partially driven by a $500,000 purchase from Trump-affiliated World Liberty Financial.